Taking new approaches to money lessons
Banks and businesses are testing creative ways to teach adults and teens to manage their money better
Like many companies, Staples Inc. has tried a number of tactics to encourage workers to save for retirement. The Framingham office supply chain automatically enrolls longtime employees in its 401(k) retirement plan. It offers matching company contributions. It provides retirement planning calculators on its internal website.
And now, it’s trying vampires.
Yes, vampires. Staples recently started featuring the mythological creatures on T-shirts, posters, and oversize postcards to promote an online video game called Bite Club, designed to teach people to save money by allowing users to play the role of the owner of a vampire nightclub. The poster reads: “When you’re immortal, retirement is eternal.’’
Bite Club is just one example of how companies, nonprofits, and educators are turning to nontraditional ways to teach adults and students to manage their money - from video games to theater performances to role playing workshops. The initiatives come as the disappearance of traditional pensions makes more US workers responsible for financing their retirements and a growing number of studies find that most Americans, especially those who are younger and poorer, know only a paltry amount about their finances.
Fewer than half of Americans were able to answer two basic financial questions in a study by the FINRA Investor Education Foundation two years ago. And less than a third could answer three questions correctly, even though many gave themselves top marks in math or financial expertise.
“Americans get close to a failing grade when it comes to understanding their finances and financial literacy,’’ said Gerri Walsh, president of the FINRA foundation. “People think they are better at managing their money and better at math than they actually are.’’
At the same time, many academics and government officials warn that Americans’ lack of financial knowledge has real world consequences. Some say the housing bubble was partly fueled by many home buyers taking out loans they couldn’t afford with terms they didn’t understand. And with Americans living longer, it’s increasingly important that workers learn to save.
“Everybody needs some sort of financial education,’’ said Massachusetts Treasurer Steven Grossman.
Last year, Governor Deval Patrick signed a law creating a new nonprofit to raise money to support financial literacy programs, called the Financial Literacy Trust Fund, which Grossman chairs. The state Senate is considering legislation to require public schools to teach financial literacy.
Financial companies, meanwhile, are finding fresh ways to reach people who might find traditional coursework too boring or who would never attend a workshop.
Blue Hills Bank’s charitable foundation hired a local drama teacher, Julie Beckham, to write and perform an interactive musical to teach students about money. Beckham is slated to perform the musical, called “Ms. Money & the Coins,’’ 49 times at 29 schools between November 2011 and June.
She is now working on a game show for middle school students called, “Give Me Some Credit,’’ which is slated to launch in October.
“We just wanted something fun and something memorable,’’ said Karen Marryat, chief marketing officer for Blue Hills Bank in Hyde Park, which has allocated $100,000 to the effort.
Other banks and schools are also using theater to teach children. Cambridge Savings Bank plans to spend $40,000 in a two-year partnership with Central Square Theater in Cambridge to produce a play called “Money Matters’’ aimed at teens. There have been six performances since August.
“It’s effective and useful, because it’s teens teaching their peers,’’ said Susan Lapierre, senior vice president at the Cambridge bank. “It’s more creative, it’s interactive, and it’s engaging.’’
Many credit unions and other organizations around the country have also sponsored regular workshops for high school students, called reality or financial education fairs, typically featuring interactive role playing games. HarborOne Credit Union in Brockton, for instance, has been running a “Credit for Life Fair’’ in high schools for more than a decade. During the event, students participate in a simulation of what their financial lives might look like at 25 - facing decisions about everything from car loans to credit cards to mortgages.
But a Boston nonprofit, D2D Fund, is reaching people across the country with a half-dozen financial video games, including Bite Club, designed to teach players about everything from saving for retirement to preparing for financial emergencies.
Users play the role of the owner of a nightclub catering to vampires. Players must manage the bar to earn cash, then use the money to pay off debts and save for an eternal retirement.
D2D Fund executive director Timothy Flacke said the problem with traditional financial workshops is that many adults won’t participate. Roughly 250,000 people have played his company’s games so far, available at financialentertainment.org.
“We would talk to people who would run these workshops and they would struggle to get people from the community to participate,’’ Flacke said. “It’s not where people want to spend their free time.’’
Staples already offers crossword puzzles and other games at financial literacy workshops at its corporate offices. But the company wanted a way to reach employees in stores across the country. So it worked with D2D to tailor the video game for its employees with information about Staples’ retirement plans.
“We want people to save for their future,’’ said Lisa Blasdale, senior benefits manager for Staples.
The game has made some employees rethink their retirement plans.
Vanessa Martinez, 21, who works in customer service at the company’s Lewisville, Texas, store hasn’t signed up for 401(k) plan yet, despite her mother’s nudging. But after playing Bite Club a few times, she plans to enroll at her next opportunity. “It put it in perspective,’’ Martinez said. “I’ll be more open to having money put away for the future.’’